The prospect of deep cuts in U.S. government spending resulting from the sequester, coupled with an absence of new economic stimulus proposals from the Federal Reserve, sent gold down sharply in Wednesday trading, reversing much of yesterday’s gains.

Gold futures for March delivery jumped 1.2% to $1,595.20 per ounce on Wednesday, according to CME Group. Gold traded as high as $1,612.80 and as low as $1,591.80. Gold bullion closed in London at $1,599, according to BullionVault.

Silver futures for March delivery also more than 1% to $28.94 per ounce. Wednesday’s high for silver was $29.39, while the low was $28.83.

Gold and silver funds retreated in Wednesday trading.

• The SPDR Gold Trust (NYSE:GLD) fell 1.1%.
• The iShares Gold Trust (NYSE:IAU) also declined 1.1%.
• The iShares Silver Trust (NYSE:SLV) dropped 1.4%.

Gold and silver mining ETFs also sank during the day.

• The Market Vectors Gold Miners ETF (NYSE:GDX) moved down 2%.
• The Market Vectors Junior Gold Miners ETF (NYSE:GDXJ) declinied 1.9%.
• The Global X Silver Miners ETF (NYSE:SIL) dipped 0.5%.

Gold mining shares moved down on Wednesday.

• Agnico-Eagle Mines (NYSE:AEM) slumped 0.9%.
• Barrick Gold (NYSE:ABX) slipped 1.1%.
• Eldorado Gold (NYSE:EGO) sank 3.1.
• Goldcorp (NYSE:GG) dropped 1.1%.
• Kinross Gold (NYSE:KGC) edged down 0.5%.
• Newmont Mining (NYSE:NEM) retreated 2%.
• NovaGold Resources (AMEX:NG) fell 2.4%.
• Yamana Gold (NYSE:AUY) also declined 2.4%.

Silver mining shares also mostly declined.

• Coeur d’Alene Mines (NYSE:CDE) gained 0.4%.
• Hecla Mining (NYSE:HL) fell 2.2%.
• Pan American Silver (NASDAQ:PAAS) slid 1.5%.
• Silver Wheaton (NYSE:SLW) dipped 0.6%.
• Silver Standard Resources (NASDAQ:SSRI) sank 1.6%.

As of this writing, Christopher Freeburn did not hold a position in any of the aforementioned securities. Adrian Ash of BullionVault contributed to this report.